It looks like Spring has been put on hold for a bit. The good news is that we now have most of our lakes and reservoirs filled to normal levels and our mountain snow pack is looking much better.
The current buyer tax incentives for both first time homebuyers and move up homebuyers will end on April 31st of this year, unless extended again by the Feds. The first time home buyer tax credit is for $8,000 and the move up buyer credit is for $6,500. Currently, if you are in contract by April 31st and close by June 31st and you meet the criteria for either credit then this will apply to this years Federal tax. There is much speculation at this time that the tax credits will not be extended again and as a result we are certainly watching a surge of buyer activity as the deadline quickly is approaching. The tax credits have certainly benefited many and they have also added some heat to a very ill national housing market. But, the real benefit to buyers during our current down housing market is not the tax credits. With mortgage interest rates continuing to be at historic low levels and home price remaining extremely low and most likely dropping to even lower levels, the true savings to the consumer lies here. It is important at this point for would be homebuyers to not get caught up with the fact that tax credits are going away, but to focus on the fact that we will most likely not see home purchase opportunities be this favorable again in our life times.
Have An Awesome Week!
THIS WEEKS HOT HOME LISTING!
6906 A Street
Price: $159,000
Beds: 3
Baths: 1.5
Sq Ft: 1244
Charming newer home located on the banks of city-maintained wetlands with a seasonal pond, wildlife & walking paths. The main level features a living & dining room with lam floor & woodstove, a space-efficient kitchen with lots of lots of storage, a...
According to the MBA's statistics approximately 11% of subprime loans are used by first-time homebuyers.
Last week MBA stated that "Today, homeownership stands at 69 percent because many people not able to get credit in the past have gotten the opportunity to borrow money. And, our data demonstrates that 87 percent of borrowers with subprime loans are paying their mortgages on time and enjoy the benefits of homeownership." MBA tracks 43.5 million loan database, including subprime, to track industry trends and statistics.
The Center for Responsible Lending
The Center for Responsible Lending points out that this means "loans in the subprime market are typically debt consolidation refinance loans and do not create new homeownership opportunities.
Loans that borrowers cannot afford do not lead to lasting homeownership. Comparing an 11% increase in homeownership with projected default rates of 19.4% for recent subprime loans; subprime lending appears to result in a NET LOSS of homeownership in its current form.
In addition, most borrowers who get subprime loans later refinance into new subprime loans, and many of these will also be foreclosed upon. Following the borrower through subsequent loans rather than just looking at that first loan, CRL roughly estimates in Losing Ground that actual subprime borrower foreclosure rates will be over 35%." CRL's research is based on the performance of more than six million subprime loans originated over a seven-year period.
Most sobering is the CRL prediction that "... one out of five (19 percent) subprime mortgages originated during the past two years will end in foreclosure. This rate is nearly double the projected rate of subprime loans made in 2002, and it exceeds the worst foreclosure experience in the modern mortgage market, which occurred during the 'Oil Patch' disaster of the 1980s."
Suggested Corrective Action
This past week, in testimony before the House, MBA Chairman John M. Robbins stated that "Working together, I suggest we must accomplish three things. (1) We must stabilize the subprime mortgage credit system; (2) provide assistance for homeowners facing foreclosure; and (3) finally prevent this from ever occurring again. Sound perspective and a prudent regulatory hand will soothe investors, calm editorial writers and help consumers."
If above consensus 
If below consensus 
